What’s Fixed and Variable?

Consider the model of labor pooling, with each firm locating either in an isolated site or in a cluster with other firms. Fill the blanks with “fixed” or “variable.”

a.In an isolated site, the wage is _______ and the firm’s workforce is ________ because....

---

b.In a cluster, the wage is ________ and the firm’s workforce is ________ because....

---

c.Illustrate with two graphs, one for the isolated site and one for the cluster.